Final Results for the year ended 31 December 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION WILL BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.

16 April 2025

Solvonis Therapeutics plc

("Solvonis" or the "Company")

Final Results for the year ended 31 December 2024

I am pleased to present the annual financial report and financial statements for Solvonis Therapeutics Plc (the "Company" or "Solvonis") formerly Graft Polymer (UK) Plc, for the year ended 31 December 2024.

This past year has been a transformative year for our company-one defined by strategic reorientation, decisive leadership changes, and a sharpened focus on becoming a leading player in the mental health therapeutics space.

The most visible reflection of this transformation is our rebranding to Solvonis Therapeutics plc, which received shareholder approval in January 2025. This name change signals our evolution from a polymer-focused business into a purpose-driven biotech company targeting urgent, unmet needs in mental health and addiction treatment.

During the year, we made the strategic decision to divest our non-core assets, notably the sale of our Slovenian polymer facility. This allowed us to realign resources toward high-impact therapeutic R&D and forge commercial and clinical partnerships that lay the groundwork for long-term value creation.

One of the most defining moments of the year was our agreement to acquire Awakn Life Sciences Corp., a clinical-stage biotechnology company specialising in therapies for addiction and mental health disorders. We believe this acquisition, expected to complete in 2025, positions Solvonis at the forefront of innovation in this critical field.

On governance, we welcomed Anthony Tennyson as our new CEO in May. Anthony brings deep sectoral expertise and a compelling strategic vision that has already begun to take shape in our repositioning and execution priorities.

We are proud of the resilience, agility, and dedication shown by our teams throughout this period of change. The Board extends its gratitude to all our employees, partners, and shareholders who have supported this journey. As we move into 2025, we are more focused than ever on building a therapeutics company capable of making a tangible difference in the lives of patients.

Dennis Purcell

Non-Executive Chairman

Principal Risks and Uncertainties

The Group operates in an uncertain environment and is subject to a number of risk factors. The Directors consider the following risk factors are of particular relevance to the Group's activities although it should be noted that this list is not exhaustive and that other risk factors not presently known or currently deemed immaterial may apply.

Risks associated with the financial condition of the enlarged group

Both the Company and Awakn have been historically loss making, and it is anticipated that the Group will continue to incur losses for the foreseeable future

Both the Company and Awakn have each accumulated significant losses since their inception. The Group will focus on funding its clinical and pre-clinical stage research projects and the Group will have no immediate sources of revenue. Shareholders should therefore be aware that the ongoing activities of the Group are being supported by the equity fundraising, existing cash resources and funds received from existing debt facilities entered into by Awakn. As an early-stage biotechnology company engaged in clinical and pre-clinical trials, the capital resources of the Group will be used to develop these programmes. 

There is no guarantee that any of the product candidates of the Group will reach a point of being successfully commercialised. There is therefore a high risk that the Group will continue to remain loss making for the foreseeable future. 

The combined losses of the Company and Awakn and anticipated future losses of the Group could have an adverse impact on the market price of its ordinary shares, its ability to raise capital and continued operations.

Risks associated with the business of the Group

Some of the Group's research programmes are at a very early stage of progression and there is a greater risk of those projects not being commercialised or abandoned

The Group will continue with research projects that are at a pre-clinical phase, including its aminoindane new chemical entity ("NCE") research programme. This focuses on developing serotonin, dopamine, noradrenalin targeted small molecule therapeutics for trauma related mental health disorders, such as PTSD. 

On 10 December 2024, the Company announced initial findings from a study undertaken by the University of Nottingham in relation to a NCE being developed in collaboration with Awakn. Initial study indicated that these NCEs could be used to treat PTSD and other trauma related conditions by improving pro-social behaviours.

Investors should be aware that such studies remain in their infancy and much more rigorous work will be required to demonstrate the safety and efficacy of such compounds to assess their potential to treat PTSD and other trauma related conditions. Pre-clinical and clinical data is often susceptible to varying interpretations and analyses, and many companies that believed their product candidates performed satisfactorily in pre-clinical studies and clinical trials nonetheless failed to obtain regulatory approval or reach a stage of being commercially viable.

Uncertainty relating to the success of Argent Biopharma and consequently the revenue generating potential of royalty agreements

Despite Argent Biopharma indicating that they are making positive strides towards the commercial production of their product range in particular Cannepil there is still an inherent degree of uncertainty on whether the drug will reach its commercial potential. In addition timings related to the product line are also uncertain and pharmaceutical production has the potential to be impacted by a large number of factors.

Risks associated with companies operating in the biotechnology and pharmaceutical sector

Difficulty enrolling patients in clinical trials may result in the completion of the trials being delayed or cancelled

As the Company's product candidates advance from preclinical testing to clinical testing, and then through progressively larger and more complex clinical trials, the Company will need to enrol an increasing number of patients that meet its eligibility criteria. There is significant competition for recruiting patients in clinical trials, and the Company may be unable to enrol the patients the Company needs to complete clinical trials on a timely basis or at all. The factors that affect the Company's ability to enrol patients is largely uncontrollable.

Any delays or failures in patient enrolment could significantly impact the progress of the Company's clinical trials, leading to increased costs, extended development timelines, or the inability to obtain regulatory approvals. This, in turn, could materially and adversely affect the Company's business, financial condition, results of operations, and future prospects.

General delays in clinical tests could results in delay in commercialising product candidates

It is intended that the Group will continue to progress AWKN-001 towards the completion of a Phase 3 trial and it will continue work towards undertaking a Phase 2 trial in relation to AWKN-002. The Group cannot predict whether any clinical trials will begin as planned, if they will need to be restructured, or will be completed on schedule, or at all. The Group's product development costs will increase if the Group experiences delays in clinical testing. Significant clinical trial delays could shorten any periods during which the Group may have the exclusive right to commercialise its product candidates or allow the Group's competitors to bring products to market before it is able to, which would impair the Group's ability to successfully commercialise its product candidates and may harm the Group's financial condition, results of operations and prospects.

The commencement and completion of clinical trials for the Group's products may be delayed for several reasons, including delays related, but not limited, to:

· failure by regulatory authorities to grant permission to proceed or placing the clinical trial on hold;

· patients failing to enrol or remain in the Group's trials at the rate the Group expects;

· suspension or termination of clinical trials by regulators for many reasons, including concerns about patient safety or failure of the Group's contract manufactures to comply with requirements;

· delays or failure to obtain clinical supply from contract manufacturers of the Group's products necessary to conduct clinical trials;

· product candidates demonstrating a lack of safety or efficacy during clinical trials;

· patients choosing an alternative treatment for the indications for which the Enlarged Group is developing any of its product candidates or participating in competing clinical trials;

· patients failing to complete clinical trials due to dissatisfaction with the treatment, side effects or other reasons;

· reports of clinical testing on similar technologies and products raising safety or efficacy concerns;

· competing clinical trials and scheduling conflicts with participating clinicians;

The Group's product development costs will increase if the Group experiences delays in testing or approval or if the Group needs to perform more or larger clinical trials than planned. Additionally, changes in regulatory requirements and policies may occur, and the Group may need to amend study protocols to reflect these changes. Amendments may require the Group to resubmit its study protocols to regulatory authorities, review boards or ethics committees for re-examination, which may impact the cost, timing or successful completion of that trial. Delays or increased product development costs may have a material adverse effect on the Enlarged Group's business, financial condition and prospects.

Risk related to reliance on key personnel in particular key technical staff

The business of the Group is that of a biotechnology company requiring specific technical and scientific skills required to undertake the R&D activities currently being planned by the Enlarged Group. Qualified individuals are in high demand, and the Company may incur significant costs to attract and retain them.

The loss of the services of any key personnel, or an inability to attract other suitably qualified persons when needed, could prevent us from executing on its business plan and strategy, and it may be unable to find adequate replacements on a timely basis, or at all. The Group particularly relies upon its key technical staff to complete important research and development on behalf of the Group, and the loss of such individuals could result in interruptions and delays to ongoing work, which may, in turn, have a material adverse effect on the progress and success of the Enlarged Group's R&D activities.

Anthony Tennyson

Chief Executive Officer

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOLVONIS THERAPEUTICS PLC

Opinion

We have audited the financial statements of Solvonis Therapeutics PLC (the 'Parent Company') and its subsidiaries (the "Group"), for the year ended 31 December 2024 which comprise the consolidated statement of comprehensive income, the consolidated and company statements' of financial position, the consolidated and company statements' of changes in equity, the consolidated and company statements' of cashflows and notes to the financial statements, including a summary of significant accounting policies..

In our opinion:

· the financial statements of Solvonis Therapeutics PLC give a true and fair view of the state of the Group's and of the Parent Company's affairs as at 31 December 2024 and of the Group's loss for the year then ended and of the Group's cashflows position as at 31 December 2024;

· the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards; and

· the Parent Company financial statements have been properly prepared in accordance with UK adopted international accounting standards; and

· the Group and Parent Company financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

An overview of the scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the Parent Company, the accounting processes and controls, and the industry in which they operate.

Our scoping considerations for the Group audit were based both on financial information and risk. In total we have identified a single distinct component within the group financial statements.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. Based on our professional judgement, we determined materiality and performance materiality for the financial statements of the Group and of the Parent Company as follows:

We reported all audit differences found in excess of our reporting threshold to the audit committee.

For each Group component within the scope of our Group audit, we determined a materiality that is less than our overall Group materiality.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters, including our discussion of going concern, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.

Material uncertainty relating to going concern

We draw attention to Note 2.2 in the financial statements, which indicates that there is some uncertainty over the going concern status of the Group. This is due to the business currently being in the research and development phase where it is reliant on fundraising for its continued development of therapeutic products to eventually progress to the stage of commercial viability. As the ultimate success of future fundraising is an inherent uncertainty for businesses generally this in turn creates an inherent uncertainty over the going concern of the company.

However, our opinion is not modified in respect of this matter. This is based on the outcome of the following audit procedures where we:

· Considered the adequacy of systems and controls in place for management to prepare reliable forecasting and to manage the on-going working capital requirements of the business; and

· Assessed the financial position of the group and parent company as at the year end date to confirm the financial resources available; and

· obtained and scrutinised the forecasts for the parent company's overhead requirements for the period to December 2026, gaining assurance that the assumptions involved were reasonable; and

· obtained and scrutinised the forecasts of the new therapeutics project being developed for the period to December 2026, gaining assurance that the assumptions involved were reasonable; and

· calculated the net funding requirement, taking into account current financial resources and current secured funding; and

· considered available evidence of the ability of the business to generate debt and equity funding; and

· considered other factors potentially relevant to going concern including potential litigation and other legal matters, potential additional revenue streams, including from royalties generated via the patents currently owned by the business.

We were able to gain sufficient audit evidence to confirm that going concern remains the most appropriate basis for preparing the financial statements, however, an inherent uncertainty remains in place leading to a material uncertainty relating to going concern.

Due to the above material uncertainty over going concern there is additional uncertainty surrounding the valuation of the intangible assets of £2,088,000 (2023: £2,068,000) which may generate future revenue via an arrangement with an external party. However, this would not be for several years and due to the inherent nature of development projects, such as the one entered into, it is not possible to value the intangible asset without uncertainty. Please see narrative in the key risk section of this audit report for further detail.

We have not modified our audit report in respect to these matters.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Our consideration of climate change related risks

The financial impacts on the Group of climate change and the transition to a low-carbon economy (climate change) were considered in our audit where they have the potential to directly or indirectly impact key judgements and estimates within the financial statements.

The Group continues to develop its assessment of the potential impacts of climate change. Climate risks have the potential to materially impact the key judgements and estimates within the financial report. Our audit considered those risks that could be material to the key judgements and estimates in the assessment of the carrying value of non-current assets and closure and rehabilitation provisions.

The key judgements and estimates included in the financial statements incorporate actions and strategies, to the extent they have been approved and can be reliably estimated in accordance with the Group's accounting policies. Accordingly, our key audit matters address how we have assessed the Group's climate-related assumptions to the extent they impact each key audit matter.

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Our opinion on the Remuneration report

Kreston Reeves has audited the Remuneration report set out on pages 8 to 9 of the Annual Report for the financial year. The Directors of the Company are responsible for the preparation and presentation of the Remuneration report in accordance with the Companies Act 2006. Kreston Reeves' responsibility is to express an opinion on the Remuneration report, based on our audit conducted in accordance with International Accounting Standards. In Kreston Reeves' opinion, the Remuneration report of the Group for the period complies with the requirements of the Companies Act 2006.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

· the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

· the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

· the parent company financial statements are not in agreement with the accounting records and returns; or

· certain disclosures of directors' remuneration specified by law are not made; or

· we have not received all the information and explanations we require for our audit

Responsibilities of directors

As explained more fully in the directors' responsibilities statement (set out on pages 11 to 12), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group's and Parent

Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Capability of the audit in detecting irregularities, including fraud

· Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management; and

· Assessment of identified fraud risk factors; and

· Testing of internal controls procedures relating to key business cycles more susceptible to fraud and other irregularities including cash, payroll and credit card expenditure; and

· Review of cash and credit card expenditure to confirm no evidence of personal benefit; and

· Challenging assumptions and judgements made by management in its significant accounting estimates, in particular with respect to impairment indicators with respect to intangible assets; and

· Checking and reperforming the reconciliation of key control accounts; and

· Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and

· Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and

· Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities; and

· Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and

· Identifying and testing journal entries, with the use of data analytics, in order to identify journals carrying a higher fraud risk profile and substantiating these to appropriate audit evidence.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

· Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's or the parent company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other matters which we are required to address

We were appointed by the Audit Committee in December 2024 to audit the financial statements. Our total uninterrupted period of engagement is one period, covering the financial year ended 31 December 2024.

Non-audit services prohibited by the Financial Reporting Council's Ethical Standard were not provided to the Group or the Parent Company and we remain independent of the Group and the Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

Use of our Report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Anne Dywer BSc(Hons) FCA (Senior Statutory Auditor)

For and on behalf of

Kreston Reeves LLP

Chartered Accountants

Statutory Auditor

London

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

The accompanying notes form an integral part of the consolidated financial statements

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

The financial statements were approved by the board on 15 April 2025

 Chief Executive Officer - Anthony Tennyson

The accompanying notes form an integral part of the consolidated financial statements

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

COMPANY STATEMENT OF FINANCIAL POSITION

As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the parent company has not been separately presented in these accounts. The Company loss for the year was £1,571,634 (2023: loss of £5,085,548).

The financial statements were approved by the board on 15 April 2025

 Chief Executive Officer - Anthony Tennyson

The accompanying notes form an integral part of the consolidated financial statements

The accompanying notes form an integral part of the consolidated financial statements

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

COMPANY STATEMENT OF CHANGES IN EQUITY

The accompanying notes form an integral part of the consolidated financial statements

 The accompanying notes form an integral part of the consolidated financial statements

Net debt disclosure has not been included as the Group does not have any debt at year end

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

COMPANY STATEMENT OF CASHFLOWS

The accompanying notes form an integral part of the consolidated financial statements

Net debt disclosure has not been included as the Company does not have any debt at year end

SOLVONIS THERAPEUTICS PLC - COMPANY NUMBER 10776788

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 GENERAL INFORMATION

Solvonis Therapeutics Plc ("the Company" or "Solvonis") was incorporated in England and Wales as a limited company on 18 May 2017 as Graft Polymer (UK) Limited and was re-registered as a public limited company, Graft Polymer (UK) Plc, on 1 July 2021. On 6 January 2025 the company changed its name to Solvonis Therapeutics Plc. The Company is domiciled in England and Wales with its registered office at Eccleston Yards, 25 Eccleston Place, London, SW1W 9NF. The Company's registered number is 10776788.

The principal activities of the Company and all of its subsidiaries collectively referred to as "the Group" are the development of intellectual property related to the treatment of mental health and substance use disorders, and co-developing therapeutics for mental health disorders.

The consolidated financial statements ("financial statements") were approved for issue by the Board of Directors on 15 April 2025.

2 ACCOUNTING POLICIES

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

2.1 Basis of preparation

The financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the Companies Act 2006.

The financial statement have been prepared under the historical cost convention unless stated otherwise. The principal accounting policies are set out below and have, unless otherwise stated, been applied consistently for all periods presented in these financial statements. The financial statements have been prepared in £GBP and presented to the nearest £'000.

The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. The functional currency of the Company is Pounds Sterling (£) as this is the currency that finance was raised in.

The functional currency of the operating subsidiary in Slovenia was the Euro (€) and was the currency that mainly influences labour, material and other costs of providing services. The presentational currency of the Group is Pounds Sterling (£). Foreign operations were translated in accordance with the policies set out further below in the notes at note 2.4.

The Group presents its financial statements for the year ended 31 December 2024 and presents comparatives for the year ending 31 December 2023.

2.2 Going concern

The Directors, having made due and careful enquiry, are of the opinion that the Company and the Group will have access to adequate working capital to execute its operations over the next 12 months.

The Directors meet monthly to discuss all matters of the Group including the liquidity of the Group and its status as a going concern. The Directors review cashflow forecasts in conjunction with considering other key factors such as current cash resources, cash burn rate, access to capital and sensitivity of key inputs when assessing the financial health of the Group.

Post period end the Group announced that it had entered into an arrangement agreement with Awakn Life Sciences Corp. setting out the basis on which the parties will cooperate to execute a transaction whereby Solvonis will acquire all issued and outstanding common shares in the capital of Awakn, all outstanding restricted share units in the capital of Awakn and all outstanding deferred share units in the capital of Awakn by way of a Court approved plan of arrangement under the British Columbia Business Corporations Act. Although the transaction will not require a cash outlay from Solvonis the Directors plan to complete a fundraise alongside the acquisition to assist with the financing of various clinical trials the Group plans to complete.

Currently the Group has a relatively low cash burn rate and has direct oversight over all expenses. In its current form the Group has limited committed liabilities however should the acquisition of Awakn complete the Board are aware that they will require additional funding to complete the desired trials. As a result the auditors have included a material uncertainty relating to going concern within their audit report as is common amongst "pre-revenue" companies. Although the Board is advanced in talks with various brokers to facilitate funding they acknowledge that due to the uncertainty of timing and quantum that a material uncertainty is appropriate in this instance.

After due consideration of all the factors, the Directors consider that the Group will have adequate financial resources to continue in operational existence for the foreseeable future (being a period of at least 12 months from the date of this report) and, for this reason, the financial statements have been prepared on a going concern basis.

2.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 December each year. Per IFRS 10, control is achieved when the Company:

· has the power over the investee;

· is exposed, or has rights, to variable returns from its involvement with the investee; and

· has the ability to use its power to affects its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:

· the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

· potential voting rights held by the Company, other vote holders or other parties;

· rights arising from other contractual arrangements; and

· any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, the results of subsidiaries acquired or disposed of during the year are included in profit or loss from the date the Company gains control until the date when the Company ceases to control the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation.

2.4 Foreign currency translation

i. Functional and presentation currency

Items included in the financial statements for each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements is presented in £ Sterling, which is the Company's presentation and functional currency. The individual financial statements of each of the Company's wholly owned subsidiaries are prepared in the currency of the primary economic environment in which it operates (its functional currency). IAS 21 The Effects of Changes in Foreign Exchange Rates requires that assets and liabilities be translated using the exchange rate at period end, and income, expenses and cash flow items are translated using the rate that approximates the exchange rates at the dates of the transactions (i.e. the average rate for the period). The foreign exchange differences on translation is recognised in other comprehensive income (loss).

ii. Transactions and balances

Transactions denominated in a foreign currency are translated into the functional currency at the exchange rate at the date of the transaction. Assets and liabilities in foreign currencies are translated to the functional currency at rates of exchange ruling at balance date. Gains or losses arising from settlement of transactions and from translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement for the period.

iii. Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;

- income and expenses for each income statement are translated at the average exchange rate; and all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken to shareholders' equity. When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale.

2.5 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision maker, who are responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive Board of Directors. As the Group disposed of its Slovenian subsidiary during the year the Directors have concluded that the Group now operates solely in the singular jurisdiction of the United Kingdom. As a result the Company has removed the segment reporting presented in previous financial statements.

2.6 Impairment of non-financial assets

Non-financial assets and intangible assets not subject to amortisation are tested annually for impairment at each reporting date and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment review is based on forecasted future cash flows. If the expected discounted future cash flow from the use of the assets and their eventual disposal is less than the carrying amount of the assets, an impairment loss is recognised in profit or loss and not subsequently reversed.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units or 'CGUs').

2.7 Inventory

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first-in-first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

2.8 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, and demand deposits with banks and other financial institutions and bank overdrafts.

2.9 Financial instruments

IFRS 9 requires an entity to address the classification, measurement and recognition of financial assets and liabilities.

a)  Classification

The Group classifies its financial assets in the following measurement categories:

· those to be measured at amortised cost; and

· those to be measured subsequently at fair value through profit or loss.

The classification depends on the Group's business model for managing the financial assets and the contractual terms of the cash flows.

The Group classifies financial assets as at amortised cost only if both of the following criteria are met:

·  the asset is held within a business model whose objective is to collect contractual cash flows; and

·  the contractual terms give rise to cash flows that are solely payment of principal and interest.

b)  Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

c)  Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset.

Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Amortised cost: Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

d)  Impairment

The Group assesses, on a forward looking basis, the expected credit losses associated with any debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

2.10 Leases

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions. In all instances the leases were discounted using the incremental borrowing rate.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period. Right-of-use assets are measured at cost which comprises the following:

- The amount of the initial measurement of the lease liability;

- Any lease payments made at or before the commencement date less any lease incentives received;

- Any initial direct costs; and

- Restoration costs.

Right-of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

Payments associated with short-term leases (term less than 12 months) and all leases of low-value assets (generally less than £5k) are recognised on a straight-line basis as an expense in profit or loss.

2.11 Equity

Share capital is determined using the nominal value of shares that have been issued.

Share capital to be issued relates to salaries foregone by Directors and other consultants. Upon the issue publication of a prospectus shares will be issued to compensate the necessary parties and will be allocated amongst the share capital and share premium accounts.

The Share premium account includes any premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from the Share premium account, net of any related income tax benefits.

For the purposes of presenting consolidated financial statements, the assets and liabilities of group's foreign operations are translated at the exchange rates prevailing at the balance sheet date and items of income and expenditure are translated at the average exchange rate for the period. Exchange differences arising are recognised in other comprehensive income and accumulated in the Foreign Currency Reserve within equity.

Equity-settled share-based payments are credited to a share-based payment reserve as a component of equity until related options or warrants are exercised or lapse.

The foreign exchange reserve policy is set out in note 2.4.

Capital reduction reserve represents funds sent from the parent company to subsidiary that on the approval of Directors was reclassified from a loan in the subsidiary to an investment.

Retained losses includes all current and prior period results as disclosed in the income statement.

2.12 Share based payments

The Group has made awards of warrants and options on its unissued share capital to certain parties in return for services provided to the Group. The valuation of these warrants involved making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and interest rates. These assumptions have been integrated into the Black Scholes Option Pricing model and the Monte Carlo valuation model to derive a value for any share-based payments. These assumptions are described in more detail in note 22.  

2.13 Earnings per share

The Group presents basic and diluted earnings per share data for its Ordinary Shares.

Basic earnings per Ordinary Share is calculated by dividing the profit or loss attributable to Shareholders by the weighted average number of Ordinary Shares outstanding during the period.

Diluted earnings per Ordinary Share is calculated by adjusting the earnings and number of Ordinary Shares for the effects of dilutive potential Ordinary Shares.

2.14 Revenue

Under IFRS 15, Revenue from Contracts with Customers, five key points to recognise revenue have been assessed:

Step 1: Identity the contract(s) with a customer;

Step 2: Identity the performance obligations in the contract;

Step 3: Determine the transaction price;

Step 4: Allocate the transaction price to the performance obligations in the contract; and

Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity. Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods provided in the normal course of business, net of discounts, VAT and other sales related taxes.

Revenue is reduced for estimated customer returns, rebates and other similar allowances. Sales of goods are recognised when the control of the goods is transferred to the buyer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods. Control is considered to have transferred generally on despatch as most items are sold on a cost includes freight basis; or on delivery where Delivered Duty Paid ("DDP") Incoterms are used. The normal credit terms are 30 to 60 days upon delivery. Invoices that are issued before the transfer of control has occurred are allocated as deferred income and then recognised as revenue when the performance obligation has been satisfied.

The Group also derives revenue from the rendering of services, whereby revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably;

- it is probable that the Company will receive the consideration due under the contract;

- the stage of completion of the contract at the end of the reporting period can be measured reliably; and

- the costs incurred and the costs to complete the contract can be measured reliably.

In arrangements where fees are invoiced ahead of revenue being recognized, deferred income is recorded.

2.15 Taxation

Tax currently payable is based on taxable profit for the period. Taxable profit differs from profit as reported in the income statement because it excludes items of income and expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is proved in full on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statement. Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised of the deferred tax liability is settled.

2.16 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

When the Company acquires any plant and equipment it is stated in the accounts at its cost of acquisition less a provision.

Depreciation is charged to write off the costs less estimated residual value of plant and equipment on a straight basis over their estimated useful lives being:

- Plant and equipment: 5 - 7 years

- Buildings and leasehold improvements: 20 years

Estimated useful lives and residual values are reviewed each year and amended as required.

2.17 Intangible assets

Intangible assets acquired are initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any impairment. The gains and losses recognised in profit or loss arising from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. 

Intangible asset impairment reviews are undertaken annually, or more frequently if events or changes in circumstances indicate a potential impairment. The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or period.

2.18 Investments in Subsidiaries

Investments in Group undertakings are stated at cost.

2.19 Provisions

Provisions represent liabilities of uncertain timing or amount that are recognized when an entity has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The provision is measured at the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the provision is discounted using a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

2.20 Financial liabilities

Other financial liabilities are initially recognised at fair values less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.

2.21 Critical judgements and key sources of estimation uncertainty

The preparation of the consolidated financial statements requires management to make estimates and judgements and form assumptions that affects the reported amounts of the assets, liabilities, revenue and costs during the periods presented therein, and the disclosure of contingent liabilities at the date of the financial information. Estimates and judgements are continually evaluated and based on management's historical experience and other factors, including future expectations and events that are believed to be reasonable.

Patents and related knowledge as an intangible asset (note 10)

The estimates and assumptions in relation to the carrying value of the know-how intangible assets are considered to have the most significant effect on the carrying amounts of the financial statements.

Management have prepared a 5 year financial forecast ending at December 2028 which looks at the revenue generating ability of these intangible assets. They have confidence in various networks and contracts that the know-how will allow the Group to generate royalty and licensing revenue with relatively low associated costs. The Directors have a high level of confidence that these contracts will ultimately prove to be highly lucrative for the Group and support the current carrying value of the intangible assets.

The Directors do recognise that the success of the underlying product ranges related to the royalty agreements is uncertain and hence will continue to monitor the progress of these product lines.

However as there are no current indicators the intangible assets were assessed and concluded that no impairment charge was required.

Share based payments (Note 22)

The Group issues options and warrants to its employees, directors, investors and advisors. These are valued in accordance with IFRS 2 "Share-based payments". In calculating the related charge on issuing shares and warrants the Group will use a variety of estimates and judgements in respect of inputs used including share price volatility, risk free rate, and expected life. Changes to these inputs may impact the related charge. In the period the Group did not perform any new valuations but released expenses to the statement of other comprehensive income from valuations in prior periods.

2.22 New standards and interpretations not yet adopted

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases have not yet been adopted by the UK):

2.23 New standards and interpretations adopted

The standards and interpretations that are relevant to the Group, effective in this financial year are listed below. There has been no impact on the financial statements from the adoption of these standards.

3. SEGMENT REPORTING

The Chief Operating Decision Makers are the Board of Directors. The Board reviews the Group's internal reporting in order to assess the performance of the Group. Management has determined the operating segments based on the reports reviewed by the Board and post the disposal of the Slovenian subsidiary have determined that the Group now operates solely in the United Kingdom and henceforth have not presented geographical segmental reporting.

Due to the disposal of the Slovenian operations on 2 May 2024, the contributions from the Slovenian operating segment are not reported in the loss from continuing operations in the statement of comprehensive income. For details of the contribution of the Slovenian operations during the period up until the point of disposal, refer to Note 23.

4. REVENUE

For details of the revenue from the Slovenian operations during the period up until the point of disposal, refer to Note 23.

5. OPERATING COSTS AND ADMINISTRATIVE EXPENDITURE

A reconciliation of the amounts from the statement of profit or loss to the amounts reported in the Directors' Remuneration Report are detailed below:

On average, excluding directors, the Group employed 3 persons in the 2024 year (31 December 2023: 7)

The highest paid director received remuneration of approximately £144,000 (31 December 2023: £224,000).

6. AUDITORS REMUNERATION

7. FINANCE COSTS

8. TAXATION

No liability to income taxes arise in the period.

The current tax for the year differs from the loss before tax at a standard rate of corporation tax in the UK. A reconciliation of the tax charge is detailed below:

Deferred tax assets carried forward have not been recognised in the accounts because there is currently insufficient evidence of the timing of suitable future taxable profits against which they can be recovered. The accumulated tax losses are estimated to amount to approximately £3.086m (31 Dec 2023: £1.958m) and the carried forward deferred tax asset is estimated to amount to approximately £0.770m.

No deferred tax assets in respect of tax losses have not been recognised in the accounts because there is currently insufficient evidence of the timing of suitable future taxable profits against which they can be recovered.

9. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share is calculated by dividing the profit or loss for the year by the weighted average number of ordinary shares in issue during the period.

There is no difference between the diluted loss per share and the basic loss per share presented. Share options and warrants could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share as they are anti-dilutive for the year presented.

10. INTANGIBLE ASSETS

Group and Company

In 2018, 22,500,000 shares were issued to founding director Victor Bolduev as consideration for the ownership rights of multiple patents that were transferred to the Group. Since the acquisition of the patents in 2018 the Group has taken strides towards realising their commercial potential particularly by implementing commercial royalty agreements.

The Group has continued to apply for patents in the 2024 year and has also added key human resources to aid the monetisation of the patents in the Group.

The Directors believe that the combined knowledge embedded in the business surrounding drug delivery systems and small molecule therapeutics for substance use and mental health disorders between the Company and Awakn (Note 11) will enable the development of innovative therapeutics for the large addressable market for trauma related mental health disorders in the US and key international markets.

In line with International Accounting Standard 36 (IAS 36), the Directors have undertaken a formal assessment of these intangible assets to discern whether they are impaired.

The Directors have given due consideration to both financial and non-financial indicators and believe that the overall intellectual property of the Group is in a strong position. As a result they do not believe that any indicators of impairment exist and hence have not processed any impairment in the accounts.

11. OTHER NON-CURRENT ASSESTS

Group and Company

In July 2024, the Company entered into partnership with Awakn Life Sciences ("Awakn"), a Canadian clinical stage biotechnology company developing therapeutics for addiction and mental health, to co-develop a new generation of therapeutics for the treatment of trauma related mental health disorders such as Post-Traumatic Stress Disorder ("PTSD"), moving the Company into field of biotechnology research and development of therapeutics for the treatment of mental health conditions. The agreement included a £300,000 payment to Awakn to assist with the continuation of various clinical trials.

12. LEASES

Group

Right of use assets

A reconciliation of the carrying amount of the right-of-use asset is as follows:

Lease liabilities

A reconciliation of the carrying amount of the lease liabilities is as follows:

13. PROPERTY, PLANT AND EQUIPMENT

Group

14. INVENTORY

15. INVESTMENTS

Company

*Immaterial investment in Graft Polymer IP Limited & GraftBio Limited of £1 each

Investments in subsidiary with a cost value of £1.304m (2023: £1.304m) and accrued impairments of £1.304m (2023: £1.304m) related to the investment in Graft Polymer D.o.o which was a wholly owned subsidiary operating out of Slovenia. On 2 May 2024, the company disposed of this subsidiary for £1.

Company subsidiary undertakings

At year end the Group owned interests in the following subsidiary undertakings, which are included in the consolidated financial statements:

16. TRADE AND OTHER RECEIVABLES

The carrying amounts of the Group's trade and other receivables are denominated in the following currencies:

The Expected Credit Loss Model under IFRS 9 has not been applied to receivables due to this being inappropriate for the above receivables.

As at 31 December 2024 all trade and other receivables were fully performing and hence no provision has been processed. Trade receivables have the following aging:

The Expected Credit Loss Model under IFRS 9 has not been applied to receivables due to this being inappropriate for the above receivables.

17. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash on hand and short term deposits held with banks with a A-1+ rating. The carrying value of these approximates to their fair value. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts.